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Palm oil plan for loss

Palm oil plan for loss

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Workers unload palm oil fruit from a truck into a processing plant in the north Sumatra province of Serdang Begadai this week. Reuters

MONG Reththy Group expects to operate its palm oil plantations at a loss this year, although they will generate revenues of US$20 million, according to owner Mong Reththy.

The firm has continued to increase the size of its plantations, anticipating producing 20,000 tonnes of refined palm oil this year, from 15,000 tonnes last year. Larger plantations will make the enterprise more profitable, he said.

“Output of oil has increased because of an expansion in plantations last year,” he said, adding the company’s palm oil revenues this year were expected to be some $2 million below break-even.

The firm’s current plantations in Preah Sihanouk province cover an estimated 10,000 hectares. Mong Reththy Group currently exports palm oil to buyers in India and the European Union at $1,100 per tonne, about the same as it achieved last year.

Ministry of Agriculture, Forestry and Fishery Secretary of State Chan Tong Yves said the palm oil plantation ought to become profitable as the area under plantation increases each year, in response to growing international demand.

“The development of this sector will provide more job opportunities and also uphold the Cambodian economy,” he said

Mong Reththy Group first began producing palm oil in Cambodia in 1996.

In March, Bursa Malaysia-listed Golden Land Bhd said it aimed to obtain two concessions for palm oil in Koh Kong province.

Meanwhile, palm oil climbed to the highest level in more than six week yesterday, on concerns that stormy weather in the US may further delay the planting of soybeans, and as importers stepped up purchases of the tropical cooking oil.

The August-delivery contract gained as much as 0.6 percent to 3,438 ringgit (US$1,130) per tonne on the Malaysia Derivatives Exchange, the highest level since April 11, and ended the morning session at 3,433 ringgit. ADDITIONAL REPORTING BLOOMBERG

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